Newly released research from LSE London and Trust for London has revealed that the number of private tenants in rent arrears in England could treble in 2021, with as many as 700,000 tenants and their landlords in financial difficulty.
The pandemic has had a devasting impact on tenants and landlords across the UK, with findings from the National Residential Landlords Association showing that 7% of private renters have built arrears due to COVID-19. Whilst the average arrears were between £251 and £500, the survey found that of those in arrears, 18% now have rent debts of more than £1,000.
The survey found that younger people are most likely to have been affected with 14% of renters aged 18 to 24 and 10% of those aged 25 to 34 having built arrears since March 2020. The self-employed who rent were also most likely to be in arrears, with 17% saying they had developed rent debts since March.
Regionally, 11% of renters in the West Midlands had built arrears since March, the largest proportion of any region in England and Wales. This was followed by London where 9% of renters had accrued arrears.
According to Fintech firm, Canopy, the Government’s ban on repossessions is not addressing this growing problem of rent arrears which landlords are struggling to cope with.
Tahir Farooqui, Founder and CEO commented: “While many vulnerable tenants have been protected from homelessness from the ban, landlords have been put under mounting financial pressure during the pandemic and face lengthy court possessions proceedings, once the eviction ban is lifted on 31 March 2021.
“To help support landlords, we have just launched a new insurance policy that protects them from missed rental payments with up to 12 months’ rent paid in full should the tenant fall into arrears and not pay the rent. The Canopy Rent and Legal Protection (RLP) offers landlords the option to pay monthly at no extra cost and also protects against property damage cover, eviction of tenants or squatters along with legal proceedings, 50% of rent paid after vacant possession for up to 3 months, legal expenses coverage of up to £50,000 and 24/7 support for agents and landlords via legal advice helpline."